Stereotyping involves two processes in which first, social stereotypes are activated (stereotype activation), and then, stereotypes are applied to given targets (stereotype application). Previous behavioral studies have suggested that these two processes are independent of each other and may have different mechanisms. As few psychophysiological studies have given an integrated account of these stages in stereotyping so far, this study utilized a trait categorization task in which event-related potentials (ERPs) were used to explore the brain mechanisms associated with the processes of stereotype activation and its application. The behavioral (reaction time) and electrophysiological data showed that stereotype activation and application were elicited respectively in an affective valence identification subtask and in a semantic content judgment subtask. The electrophysiological results indicated that the categorization processes involved in stereotype activation to quickly identify stereotypic and nonstereotypic information were quite different from those involved in the application. During the process of stereotype activation, a P2 and N2 effect was observed, indicating that stereotype activation might be facilitated by an early attentional bias. Also, a late positive potential (LPP) was elicited, suggesting that social expectancy violation might be involved. During the process of the stereotype application, electrophysiological data showed a P2 and P3 effect, indicating that stereotype application might be related to the rapid social knowledge identification in semantic representation and thus may be associated with an updating of existing stereotypic contents or a motivation to resolve the inconsistent information. This research strongly suggested that different mechanisms are involved in the stereotype activation and application processes.